Under the mandatory rule of "delisting at the face value of one yuan", the stock prices of more and more listed companies are on the edge of the red line of one yuan, and there are many non-ST companies. At the close of trading on June 28, HNA Holdings (600221. SH) has fallen to 1.02 yuan per share.
Some companies with a market value of more than 10 billion yuan and a closing price of less than 2 yuan Source: Flush iFinD
There are many stocks similar to HNA Holdings' "high market capitalization and low stock price". According to Flush iFinD, as of the close of trading on June 28, there were 21 companies with a market value of more than 10 billion yuan but a share price of less than 2 yuan per share.
According to the relevant rules, if the company's stock price is lower than 1 yuan for 20 consecutive trading days, the company will be subject to face value compulsory delisting measures. Under this rule, the first non-ST company to be delisted at face value appeared during the year: on June 21, Zhengyuan announced that it would terminate its listing and delisting on June 27, 2024.
Some listed companies are actively "saving themselves". After the stock price fell to 0.85 yuan per share for 7 consecutive days, *ST Jiyao announced on the evening of June 27 that the company's two supervisors planned to increase their holdings by a total of 400-7 million yuan. HNA Holdings also announced on the 30th that American Aviation increased its stake in B shares.
However, due to the par value delisting rule of "one yuan par value delisting", the closer the stock price is to 1 yuan, the more likely it is that the listed company will be delisted at par value, and the more the stock will be sold at a low price. However, in an interview with a reporter from Nandu Bay Finance Agency, relevant experts said that there is no problem with the rule of "delisting at the face value of one yuan", but it can be further improved in terms of "allowing joint shares".
The stock price of more than 200 listed companies fell below 2 yuan, and the risk of delisting at face value is high
In addition to Zhengyuan shares, since the beginning of this year, there have been Zhongyin Cashmere (000982), *ST Baan (300262.SZ), ST Dima (600565.SH) and other companies have been delisted or waiting to enter the delisting because the stock price is less than 1 yuan per share for 20 consecutive trading days.
Other listed companies are facing the pressure of "delisting at the face value of one yuan". The reporter of Nandu Bay Finance Society found through the statistics of Flush iFinD that as of June 28, the stock price of 21 listed companies in the A-share market fell below 1 yuan per share, the stock price of 212 listed companies fell below 2 yuan, and the stock price of less than 3 yuan reached 479.
When the stock price is closer to the red line of 1 yuan per share, the more some investors are worried about the risk of delisting of listed companies. With the gradual increase in the number of cases of par value delisting, penny stocks are attracted by the sentiment of par value delisting, and there are more and more cases of risk aversion.
According to Flush iFinD data, as of June 28, a total of 192 stocks in the A-share market were priced between 1-2 yuan per share par value; A month ago, as of the close of trading on May 27, the number of stocks with a par value of 1-2 yuan per share was only 131.
For example, for Lingnan shares and Guanghui Automobile, whose stock prices have fallen below 1 yuan recently, some analysts said on social platforms that the stock prices of the two companies have a risk of delisting if they fall below 1 yuan, and they are in a downward trend, so it is recommended to "go out of the market and avoid risks".
But in fact, some of the companies facing the risk of delisting due to the decline in face value are many listed companies with a market value of 10 billion.
As of the close of trading on June 28, 21 of the 212 listed companies with a closing price of less than 2 yuan had a market value of more than 10 billion yuan, of which the total market value of Baotou Steel Co., Ltd. and HNA Holdings reached 63.567 billion yuan and 44.066 billion yuan.
Among the above-mentioned listed companies, there are also those whose operating performance has not shown significant negative results.
Taking HNA Holdings as an example, in the secondary market, since 2024, the share price of HNA Holdings has hovered between 1.38-1.53 yuan per share for a long time; After June, the stock price took a sharp turn, and by the close of trading on the 28th, the share price of HNA Holdings had fallen to 1.02 yuan per share.
However, according to the annual report of HNA Holdings, the company will achieve operating income of 58.641 billion yuan and net profit attributable to the parent company of 311 million yuan in 2023, and in the first quarter of this year, HNA Holdings' operating income and net profit attributable to the parent company will be 17.55 billion yuan and 687 million yuan respectively, both of which are further improved compared with the same period in 2023.
If the stock price falls below 1 yuan, how effective is the self-help of enterprises?
In the face of severe delisting risks, some companies have also begun to save themselves.
After experiencing a continuous decline in stock prices, on June 24, non-ST shares Hualian announced that the company's stock price was lower than 1 yuan for the first time after the close of trading on June 24, and there was a risk that the listing may be terminated because the stock price was lower than the par value.
Just recently, in order to stabilize the "falling and falling" stock price, Hualian shares "self-help" plan has been introduced. On June 24, Hualian Co., Ltd. issued a repurchase plan, planning to use its own funds of not less than 30 million yuan (inclusive) and no more than 60 million yuan (inclusive) for share repurchase.
Hualian also said that Hualian Group, the controlling shareholder of the company, will increase its holdings of the company's shares through centralized bidding and block trading within 6 months from June 6, 2024, with an increase of no less than 30 million yuan and no more than 60 million yuan. As of June 24, Hualian Group has increased its holdings of 11.928 million shares of the company through centralized bidding, with a turnover of 13.3651 million yuan. Hualian Group promises not to reduce its shareholding in the company during the period of this shareholding increase and within 12 months after the completion of the implementation of the shareholding increase plan.
In addition, on June 13, some directors and executives of Hualian also increased their holdings of the company's shares through centralized bidding transactions.
After experiencing a "self-help", on June 25, the share price of Hualian once rose back to 1 yuan / share, but fell to 0.98 yuan / share at the close. As of the close of trading on June 28, the share price of Hualian shares was 0.93 yuan per share.
Some ST stocks are also actively saving themselves. At the close of trading on June 27, the share price of *ST Jiyao fell to 0.85 yuan per share, and has fallen for 7 consecutive days. In the evening, *ST Jiyao announced that Ren Wenan, chairman of the board of supervisors of the company, and Zhang Liyun, supervisor, planned to increase their holdings by a total of 4 million to 7 million yuan. In addition, the two also increased their holdings of 500,000 shares of the company in the secondary market on the 27th.
*ST Jiyao's recent stock price changes Source: Flush iFinD
On June 28, *ST Jiyao shares got rid of the 7-day downward trend, and the stock price opened slightly higher after the limit. However, the closing price only reached 1.02 yuan per share, and it has not yet gotten rid of the risk of delisting at par value.
HNA Holdings has also made corresponding moves. In response to investors' questions about the decline in stock prices on the securities interactive platform, HNA responded that the stock price in the secondary market is affected by many complex factors, and the company always believes that doing a good job in operation and achieving good performance is the basis for the company's value enhancement.
On June 30, HNA Holdings announced that American Aviation, the person acting in concert with its controlling shareholder, plans to increase its holdings of the company's B shares within 6 months from June 28, 2024 (inclusive), with an amount of not less than US$5 million and no more than US$10 million. After the increase, American Aviation's stake in the total share capital will increase from 0.50% to 0.51%.
Is there room for improvement in the "delisting of the delisting of the denomination of one dollar"?
Expert: There is nothing wrong with the regulation itself, and mergers should be allowed
According to the relevant rules of A-shares, if the stock price of a listed company falls below RMB 1 for 20 consecutive trading days, it will be subject to mandatory delisting measures at par value. However, for the "par value delisting" that may occur more and more, there is a view that the "magnetic effect" of the capital market makes the stock price closer to 1 yuan, the greater the possibility of the listed company going to the par value delisting; Investors are hedging their risk, and the more the stock is sold at a low price, it eventually leads to delisting at par.
In this regard, relevant experts said in an interview with a reporter from Nandu Bay Finance Society that although there is a possibility of "accidental injury", there is no problem with the provision of "delisting at the face value of one yuan" itself.
Yang Delong, chief economist of Qianhai Open Source Fund, said that the "one-yuan face value delisting" rule is mainly to prevent some companies from not delisting after their fundamentals deteriorate, which is a sharp weapon to clean up junk stocks.
Shen Meng, director of Xiangsong Capital, also said that although the new rules on par value delisting do have the possibility of "accidental injury" for some listed companies and their investors with normal performance and operation, from a legal point of view, par value delisting still has its reasonableness, and those listed companies that may be mistakenly injured should take the initiative to remove relevant risks by improving performance or repurchase.
"Long-term delisting below par value is a common rule in markets around the world, so what needs to be adjusted is the perception of investors and the ability of listed companies to respond." Shen Meng said.
In addition, many experts also pointed out that for listed companies that have split shares and give away shares, the provisions of "delisting at the face value of one yuan" should be adjusted accordingly.
The above-mentioned HNA Holdings, which has a market value of more than 44 billion yuan, is in this situation. HNA Holdings has issued a "10 get 10 free" policy twice in 2012 and 2021. After the "stock split", the equity per share is significantly diluted compared to the original share structure, so it is now close to the hidden danger of delisting at par value.
In this regard, Pan Helin, a well-known economist, said that some listed companies blindly implemented the "10 for 10 to 10" stock split in the past, with a lot of share capital, but the price is very low, the system has changed, and the shares of these companies are most likely to fall below 1 yuan. Therefore, the "delisting at par value" rule should be supplemented with relevant provisions, such as allowing mergers.
Yang Delong also suggested that for stocks with share capital splits, the absolute stock price should be considered due to the share gift, and after the empowerment, see if it falls below 1 yuan per share.
Written by: Liu Changyuan, reporter of Nandu Bay Finance Society